The share of US workers represented by a union ended 2024 at 9.9%. Strip out public sector workers and the rate was 5.9%. Both numbers are even more stunning once you realize union representation is less now than 1934, the year before the right to organize was enshrined into law by the National Labor Relations Act. Logically, the decline is either because the desire or need to be in a union has diminished, or the law has become so weak that the right to organize is no longer protected. Although both are to blame, it’s mostly the latter.
Legal protections for organizing workers are so weak they basically doesn’t exist, a erosion of rights decades in the making that culminated in January when President Donald Trump fired Gwynne Wilcox from the National Labor Relations Board. That left the NLRB with two members, a number insufficient for a quorum and effectively eliminating any protection for organizing workers.
And yet, labor proponents have an opportunity to spark a union renaissance – something most Americans would support. Polling shows that 71% of Americans approve of unions, rates not seen since the 1950s and 1960s. Even higher percentages sided with the striking auto workers, actors and writers in 2023. And the majority of Americans think the decline in unionization is bad for the country, while approval of big businesses has dropped from 48% to 25% since 2001.
Economists are coming around to the public’s view. The classic argument against unions is that they establish a labor cartel that pulls wages above productivity, a net negative for the economy. But that assumes the labor market is otherwise perfectly competitive and employers do not have the power to pay workers below their productivity. More and more evidence has shown that many employers benefit from a degree of monopsony power and use a lack of strong competition from other employers to pay workers less. Of course, in some cases they directly collude with other employers to achieve the same outcome.
The classic two-dimensional argument also doesn’t account for the increase in productivity of workers associated with unionization, which makes the effect of unionization on labor demand much more nuanced than a simple up or down. Unions also provide spillovers that benefit the economy, like enforcing workplace safety standards. Even if everything bad about unions is assumed to be true, they effectively reduce inequality in the economy.
Economists, and to a certain extent politicians, have been hunting for the contributors to the “golden middle” — the period between 1940 and 1980 when the bottom 50% took home larger and growing shares of total income. Using historical data from Gallup, economists found that unionization was a key causal contributor to the drop in income inequality in the 15 years after the National Labor Relations Act was passed. That was no small feat, especially considering it hasn’t been recreated. The income share of the bottom 50% has steadily declined since 1980 and reached just 13.4% of total income in 2023, the lowest on record apart from the middle years of the Great Depression (1932-1934) and the weak labor market following the Great Recession (2014-2016).
But Americans’ support of unions, coupled with economists’ assessment that they could at least counter, if not reverse, the erosion of income earned by the bottom, runs up against a brick wall represented by a lack of legal protections.
Assaults on the right to organize have been relentless, from “right to work” laws and the more than $400 million union avoidance consulting industry, to harassment and threats against workers trying to organize and overt union busting tactics. In a shockingly higher number, a 2019 study found that employers were charged with violating federal law in 41% of all organizing campaigns. Even if workers are successful in voting for unionization, employers have the means to stall the contract process for years. The first Starbucks coffee shop to unionize was in Buffalo in 2021, and more than 500 stores followed but there is still no collective bargaining agreement. Same with the Amazon.com warehouse in Staten Island, New York, that voted to unionize in 2022.
Union advocates have long fought for the PRO Act, a bill that would reestablish protections for the right to organize. It’s a good step, but the better solution is to shift reliance from enterprise-based bargaining, where individual worksites are unionized, to sectoral bargaining, where industries, occupations, and regions are governed by a set of minimum labor standards. Sectoral bargaining agreements are by nature broad, meaning they have more coverage and less teeth. Industry or occupation boards would write standards to establish the floor of wages and working conditions. All workers are covered and union membership is not necessary.
Sectoral agreements are standard in Europe, but in some ways they are more fitting to the US’s style. Indeed, in the early days after the Fair Labor Standards Act of 1938, industry “tripartites” of union, business, and public representatives set wages for specific industries. The tripartites were effective but abandoned after the Taf- Hartley Act of 1947. Conservatives would likely blame big unions like the American Federation of Labor that opposed government involvement in labor. Liberals would instead blame southern Democrats who were wary of empowering black workers. Neither reason serves as an excuse today.
For all the attention paid on big enterprise-based wins in union elections, the wins in raising wages and standards for more workers are the real sectoral progress, like California’s new Fast Food Wage board, the new rideshare driver wage established in Massachusetts, or the new workforce standards board for nursing-home workers in Minnesota. Unless a further slide into deeper inequality is the goal, unions are a salve, and thus sectoral bargaining is the future.
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